GCR Holdings Ltd. recorded a near 35 percent drop in net income for the second quarter of fiscal 1997, when compared to the same period in 1996.

Yet the company still made $17.2 million for the three month period (1996: $26.4 million).

GCR Holdings Ltd. is the parent to Global Capital Reinsurance Ltd., which provides property catastrophe, property risk excess-of-loss, property pro rata, marine, energy, satellite and financial products reinsurance to insurers on a worldwide basis.

Six month figures of $40.5 million in net income are nearly a 17 percent decline from the $49.2 million declared for the same period a year before.

Excluding net realised gains and losses on investments, net operating income was $40.8 million for the half-year, compared to $48 million in the prior year's first six month period.

Gross premiums written were $66 million for the second quarter (1996: $66.5 million) and year to date gross premiums written were $70.1 million (1996: $74 million).

Premiums ceded for the quarter and the year to date were $3.8 million, principly to Capital Global Underwriters, a new joint venture the company started with Capital Re Corp.

Premiums earned were $24 million for the quarter and $54.4 million for the six months, compared to $30.6 million and $63.5 million, respectively in the same periods during the comparative year.

President and CEO, Lawrence Doyle, said, "As anticipated, ongoing favourable loss experience in our core property catastrophe business has resulted in continued price competition. We have seen rate reductions of 15 percent on average in the quarter.

"We continue to force our disciplined underwriting strategy, which emphasises careful selection of risk and a gradual reduction in exposure as a means of reducing potential volatility under these market conditions.

"Gross written premiums were flat for the quarter compared to those written in the second quarter a year ago.

"For the first time, however, we ceded a portion of our premiums to others, including our joint new venture which is accounted for on an equity basis.

Earned premiums were impacted as well by the effects of a significant new two-year contract for which the second year premium is unearned and by negative adjustments on certain contracts for which clients provide an estimate of subject premium.

"There were no significant catastrophic events during the quarter and our loss experience continues to be very favourable by industry standards.'' Investment income for the six month period was $13 million, compared to $15.9 million in the first six months of fiscal 1996, reflecting the sale of investments to provide for the elimination of the company's debts in February 1996. The yield on invested assets improved in the quarter as duration of a portion of the portfolio was lengthened.

For the quarter, loss and loss expenses were $5.8 million, compared to $3.2 million for the second quarter of the year before. The loss ratio was 24.2 percent for the quarter, compared to 10.4 percent in the comparative period.

Doyle said, "The current quarter loss ratio, while quite good, suffers by comparison to that of the prior year, which included favourable loss development related to previously reported events.'' Loss and loss expenses were $12 million, compared to $13.4 million for the first half of fiscal 1996.

The loss ratio was 22.1 percent, as opposed to 21.1 percent in the comparative period.

The joint venture, Capital Global Underwriters, and Global Capital Underwriting Ltd., a wholly owned subsidiary formed in late 1996 as a parallel syndicate underwriting a marine insurance portfolio at Lloyd's of London, made modest contributions to the bottom line in the quarter. Both ventures are expected to have a meaningful impact on future results.